corporate Governance Under The New York Corporation Tax Laws

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1 64 SHELL ANNUAL REPORT AND FORM 20-F 2013 REPORTS.SHELL.COM CORPORATE GOVERNANCE Dear Shareholders, I am pleased to introduce this report which describes our governance arrangements and explains how they operated during the year. We are for the first time required to report against the 2012 version of the Financial Reporting Council s Corporate Governance Code, and I can report that we were fully compliant in A requirement of the new Code is that the Board must state that it considers the Annual Report including the financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company s performance, business model and strategy. We have taken this responsibility very seriously and have strived to apply this principle throughout the Report. In making our judgement, we were supported by advice from the Audit Committee, which this year has produced a separate report signed by the Chairman of that Committee (see pages 74-75). As Chairman of the Nomination and Succession Committee, I am very mindful of my responsibility for succession planning. Following the decision by Peter Voser to stand down as Chief Executive Officer at the end of 2013, the Committee conducted a thorough search of internal and external candidates with the assistance of an external search consultant, and we were delighted to announce the appointment of Ben van Beurden, formerly Downstream Director, as Peter s successor with effect from January 1, During the year, the Committee has also been busy seeking suitable candidates for Non-executive Directors, and we were delighted to announce in January that Euleen Goh and Patricia A. Woertz have both agreed to join the Board, subject to shareholder approval at the forthcoming Annual General Meeting, with effect from September 1, 2014, and June 1, 2014, respectively. More recently we announced that Josef Ackermann has decided to stand down as a Non-executive Director at the Annual General Meeting, and I would like to take this opportunity to thank him for his distinguished service to the Company. The Board and the Nomination and Succession Committee continue to be aware of the importance of diversity within the Boardroom and believe that maintaining an appropriate balance of experience, skills, knowledge and backgrounds is key to effective Board performance. The Board believes gender diversity is an important element of this mix and we have stated our aim that by 2015 at least 25% of the Directors will be women. This is in line with the recommendations of the report by Lord Davies of Abersoch entitled Women on Boards (Davies Report) and, should shareholders approve the appointment of Euleen Goh and Patricia A. Woertz referred to above, we will have met our aim. Towards the end of the year, the Board conducted its annual evaluation of its own performance, the Board committees and individual directors. As in previous years, this was led by the Nomination and Succession Committee; however, on this occasion the process was externally facilitated. Once again the process was extremely insightful for us all, and the independent element brought by the external facilitator gave a useful dimension to our discussions. We are committed to the highest standards of corporate governance and believe they are important for the long-term success of the Company. I would like to thank my fellow Directors for their support in helping achieve these standards during the year. STATEMENT OF COMPLIANCE The Board confirms that throughout the year the Company has applied the main principles and complied with the relevant provisions set out in the UK Corporate Governance Code (the Code) issued by the Financial Reporting Council in September In addition to complying with applicable corporate governance requirements in the UK, the Company must follow the rules of Euronext Amsterdam as well as Dutch securities laws because of its listing on that exchange. The Company must likewise follow US securities laws and the New York Stock Exchange (NYSE) rules and regulations because its securities are registered in the USA and listed on the NYSE. NYSE GOVERNANCE STANDARDS In accordance with the NYSE rules for foreign private issuers, the Company follows home-country practice in relation to corporate governance. However, foreign private issuers are required to have an audit committee that satisfies the requirements of the U.S. Securities and Exchange Commission s Rule 10A-3. The Company s Audit Committee satisfies such requirements. The NYSE also requires a foreign private issuer to provide certain written affirmations and notices to the NYSE, as well as a summary of the significant ways in which its corporate governance practices differ from those followed by domestic US companies under NYSE listing standards (see NYSE Rule 303A.11). The Company s summary of its corporate governance differences is given below and can be found at Non-executive Director independence The Board follows the provisions of the Code in determining Nonexecutive Director independence, which states that at least half of the Board, excluding the Chairman, should comprise Non-executive Directors determined by the Board to be independent. In the case of the Company, the Board has determined that all the Non-executive Directors as at the end of 2013 are wholly independent. Nominating/corporate governance committee and compensation committee The NYSE listing standards require that a listed company maintain a nominating/corporate governance committee and a compensation committee, both composed entirely of independent directors and with certain specific responsibilities. The Company s Nomination and Succession Committee and Remuneration Committee, respectively, comply with these requirements, except that the terms of reference of the Nomination and Succession Committee require only a majority of the committee members to be independent. Audit Committee As required by NYSE listing standards, the Company maintains an Audit Committee for the purpose of assisting the Board s oversight of its financial statements, its internal audit function and its independent auditors. The Company s Audit Committee is in full compliance with the U.S. Securities and Exchange Commission s Rule 10A-3 and Section 303A.06 of the NYSE Listed Company Manual. However, in accordance with English law, the Company s Audit Committee makes recommendations to the Board for it to put to shareholders for approval in general meeting regarding the appointment, reappointment and removal of independent auditors. Consequently, the Company s Audit Committee is not directly responsible for the appointment of independent auditors. Shareholder approval of share-based compensation plans The Company complies with the listing rules of the UK Listing Authority (UKLA), which require shareholder approval for the adoption of share- Jorma Ollila Chairman March 12, 2014

2 GOVERNANCE 65 SHELL ANNUAL REPORT AND FORM 20-F 2013 CORPORATE GOVERNANCE based compensation plans which are either long-term incentive schemes in which one or more Directors can participate or schemes which involve or may involve the issue of new shares or the transfer of treasury shares. Under the UKLA rules, such plans cannot be changed to the advantage of participants without shareholder approval, except for certain minor amendments, for example to benefit the administration oftheplanortotakeaccountoftaxbenefits.therulesonthe requirements to seek shareholder approval for share-based compensation plans, including those in respect of material revisions to such plans, may deviate from the NYSE listing standards. Code of business conduct and ethics The NYSE listing standards require that listed companies adopt a code of business conduct and ethics for all directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers. The Company has adopted the Shell General Business Principles (see below), which satisfy the NYSE requirements. The Company also has internal procedures in place by which any employee can raise in confidence accounting, internal accounting controls and auditing concerns. Additionally, any employee can report concerns to management through a worldwide dedicated telephone line and website without jeopardising their position (see below). SHELL GENERAL BUSINESS PRINCIPLES The Shell General Business Principles define how Shell subsidiaries are expected to conduct their affairs. These principles include, among other things, Shell s commitment to support fundamental human rights in line with the legitimate role of business and to contribute to sustainable development. They can be found at SHELL CODE OF CONDUCT Directors and employees are required to comply with the Shell Code of Conduct, which is intended to help them put Shell s business principles into practice. This code clarifies the basic rules and standards they are expected to follow and the behaviour expected of them. It can be found at CODE OF ETHICS Executive Directors and Senior Financial Officers of Shell must also comply with a Code of Ethics. This code is specifically intended to meet the requirements of Section 406 of the Sarbanes-Oxley Act and the listing requirements of the NYSE (see above). It can be found at SHELL GLOBAL HELPLINE Employees, contract staff, third parties with whom Shell has a business relationship (such as customers, suppliers and agents), and any member of the public (including shareholders) may raise ethics and compliance concerns through the Shell Global Helpline. This is a worldwide confidential reporting mechanism, operated by an external third party, which is available 24 hours a day, seven days a week by telephone and at or BOARD STRUCTURE AND COMPOSITION During 2013, the Board comprised the Chairman; two Executive Directors, namely the Chief Executive Officer and the Chief Financial Officer; and eight Non-executive Directors, including the Deputy Chairman and Senior Independent Director, except for the period from January 1 to May 21 when there were 10 Non-executive Directors [A]. A list of current Directors, including their biographies, can be found on pages [A] Christine Morin-Postel and Jeroen van der Veer stood down as Non-executive Directors on May 21, Peter Voser stood down as Chief Executive Officer on December 31, 2013, and was succeeded by Ben van Beurden. The Board recognises its collective responsibility for the long-term success of the Company. Generally it meets eight times a year [B] and has a formal schedule of matters reserved to it. This includes: overall strategy and management; corporate structure and capital structure; financial reporting and controls, including approval of the Annual Report and Form 20-F, and interim dividends; oversight and review of risk management and internal controls; significant contracts; and succession planning and new Board appointments. The full list of matters reserved to the Board for decision can be found at [B] See page 66 for the number of meetings held in ROLE OF DIRECTORS The roles of the Chairman, a non-executive role, and the Chief Executive Officer are separate, and the Board has agreed their respective responsibilities. The Chairman is responsible for the leadership and management of the Board and for ensuring that the Board and its committees function effectively. One way in which this is achieved is by ensuring Directors receive accurate, timely and clear information. He is also responsible for agreeing and regularly reviewing the training and development needs of each Director (see Induction and training on page 66) which he does with the assistance of the Company Secretary. The Chief Executive Officer bears overall responsibility for the implementation of the strategy agreed by the Board, the operational management of the Company and the business enterprises connected with it. He is supported in this by the Executive Committee, which he chairs (see page 67). NON-EXECUTIVE DIRECTORS Non-executive Directors are appointed by the Board or by shareholders in general meeting and, in accordance with the Code, must seek re-election by shareholders on an annual basis. Their letter of appointment refers to a specific term of office, such term being subject to the provisions of the Code and the Company s Articles of Association (the Articles). Upon appointment, Non-executive Directors confirm they are able to allocate sufficient time to meet the expectations of the role. Appointments are subject to three months notice, and there is no compensation provision for early termination. The Non-executive Directors bring a wide range and balance of skills and international business experience to Shell. Through their contribution to Board meetings and to Board committee meetings, they are expected to challenge constructively and help develop proposals on strategy and bring independent judgement on issues of performance and risk. Generally, prior to each meeting of the Board, the Chairman and the Non-executive Directors meet without the Executive Directors to discuss, among other things, the performance of individual Executive Directors. A number of Non-executive Directors also meet major shareholders from time to time. The role of the Senior Independent Director is to provide a sounding board for the Chairman and to serve as an intermediary for the other Directors when necessary. The Senior Independent Director is available to shareholders if they have concerns which contact through the normal channels of Chairman, Chief Executive Officer or Chief Financial Officer has failed to resolve or for which such contact is inappropriate. All the Non-executive Directors as at the end of 2013 are considered by the Board to be wholly independent. [A] [A] Jeroen van der Veer, formerly a Non-executive Director who served as Chief Executive until his retirement from that role on June 30, 2009, stood down on May 21, 2013.

3 66 SHELL ANNUAL REPORT AND FORM 20-F 2013 REPORTS.SHELL.COM CORPORATE GOVERNANCE CONTINUED CONFLICTS OF INTEREST Certain statutory duties with respect to directors conflicts of interest are in force under the Companies Act 2006 (the Act). In accordance with the Act and the Articles, the Board may authorise any matter that otherwise may involve any of the Directors breaching his or her duty to avoid conflicts of interest. The Board has adopted a procedure to address these requirements. It includes the Directors completing detailed conflict of interest questionnaires. The matters disclosed in the questionnaires are reviewed by the Board and, if considered appropriate, authorised in accordance with the Act and the Articles. Conflicts of interest as well as any gifts and hospitality received by and provided by Directors are kept under review by the Board. SIGNIFICANT COMMITMENTS OF THE CHAIRMAN The Chairman s other significant commitments are given in his biography on page 58. INDEPENDENT PROFESSIONAL ADVICE All Directors may seek independent professional advice in connection with their role as a Director. All Directors have access to the advice and services of the Company Secretary. The Company has provided both indemnities and directors and officers insurance to the Directors in connection with the performance of their responsibilities. Copies of these indemnities and the directors and officers insurance policies are open to inspection. Copies of these indemnities have been previously filed with the U.S. Securities and Exchange Commission (SEC) and are incorporated by reference as an exhibit to this Report. BOARD ACTIVITIES DURING THE YEAR The Board met nine times during the year. Eight of the meetings were held in The Hague, the Netherlands, and one meeting was held in Johannesburg, South Africa. The agenda for each meeting included a number of regular items, including reports from each of the Board committees and from the Chief Executive Officer, the Chief Financial Officer and the other members of the Executive Committee. At most meetings the Board also considered a number of investment, divestment and financing proposals. During the year, the Board considered numerous strategic issues and approved each of the quarterly, half-year and full-year financial results and dividend announcements. Specific attention in 2013 was paid to matters and projects in Alaska, Iraq and Nigeria, and to asset integrity and process safety, deep-water strategy, trading, anti-bribery and corruption, risk management and control including security risk management, and safety and environmental performance. The Board received reports and presentations on all these subjects which it discussed and considered. The Board also received regular reports from each of the Board committees and the various functions, including Finance (which includes Investor Relations), Health and Security, Human Resources, and Legal (which includes the Company Secretary). INDUCTION AND TRAINING Following appointment to the Board, Directors receive a comprehensive induction tailored to their individual needs. This includes site visits and meetings with senior management to enable them to build up a detailed understanding of Shell s business and strategy, and the key risks and issues with which they are faced. In the case of Gerrit Zalm, who was appointed with effect from January 1, 2013, Director-specific briefing materials were made available and induction sessions were held with various functions and businesses. Site visits were undertaken to Shell operations in the Netherlands and South Africa and, as a member of the Corporate and Social Responsibility Committee, he also visited Shell operations in Alaska. Throughout the year, regular updates on developments in legal matters, governance and accounting are provided to Directors. The Board regards site visits as an integral part of ongoing Director training. Additional training is available so that Directors can update their skills and knowledge as appropriate. ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS Attendance during 2013 for all Board and Board committee meetings is given in the table below. ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS [A] Board Audit Committee Corporate and Social Responsibility Committee Nomination and Succession Committee Remuneration Committee Josef Ackermann 9/9 6/6 6/6 Guy Elliott 9/9 6/6 Simon Henry 9/9 Charles O. Holliday 9/9 4/4 6/6 Gerard Kleisterlee 9/9 6/6 Christine Morin-Postel 3/3 2/3 Jorma Ollila 9/9 6/6 Sir Nigel Sheinwald 9/9 4/4 Linda G. Stuntz 9/9 6/6 Jeroen van der Veer 3/3 2/2 Peter Voser 9/9 Hans Wijers 9/9 6/6 6/6 Gerrit Zalm 9/9 4/4 [A] The first figure represents attendance and the second figure the possible number of meetings. For example, 7/8 signifies attendance at seven out of eight possible meetings. Where a Director stood down from the Board or a Board committee during the year, or was appointed during the year, only meetings before standing down or after the date of appointment are shown.

4 GOVERNANCE 67 SHELL ANNUAL REPORT AND FORM 20-F 2013 CORPORATE GOVERNANCE BOARD EVALUATION During the year, the Board carried out a performance evaluation of itself, its Committees, the Chairman and each of the other Directors. As in previous years, this was led by the Nomination and Succession Committee. On this occasion, it engaged Lintstock Limited, a Londonbased corporate advisory firm with no other connection to the Company, as an external facilitator to assist in the process. The process involved each Director completing a confidential online questionnaire designed by the external facilitator and the Nomination and Succession Committee. The completed questionnaires were available only to the facilitator, which prepared a report for each of the Chairman, the Deputy Chairman and the chairmen of the Board committees. The Chairman then held one-to-one interviews with each of the Directors to discuss the reports. In addition, the Deputy Chairman interviewed the Chairman, and the Board committee chairmen held one-to-one interviews with members of their respective committees. In January 2014, the performance of the Board as a whole and the Board committees was discussed by the Nomination and Succession Committee and subsequently by the full Board. The discussions were led by the Chairman and focused on issues such as Board composition, time management, quality of support, succession planning, resource management, strategic oversight and risk management and control. Directors rated the performance of the Board in relation to each of these issues and made a number of suggestions going forward. These included giving a greater focus to strategic matters, industry trends and risk, and to increasing Board exposure to senior management below the level of the Executive Committee. The performance evaluation of the Chairman was reviewed in a session led by the Deputy Chairman with attendance by all Directors except for the Chairman. Directors had previously answered questions concerning the performance of the Chairman in relation to communication and relationships with the Chief Executive Officer and other Directors, dealing with director-related issues, availability outside Board meetings, management of Board meetings, relationships with major shareholders, and relationships with other stakeholders. The Deputy Chairman reported that the Directors had commented favourably on the Chairman s accessibility, consensual style and drive for a performance-led culture, and that the unanimous view of the Chairman s performance in 2013 was positive. The results of the evaluation of the Chief Executive Officer and the Chief Financial Officer were discussed by the Chairman and the Nonexecutive Directors. EXECUTIVE COMMITTEE The Executive Committee operates under the direction of the Chief Executive Officer in support of his responsibility for the overall management of the Company s business and affairs. The Chief Executive Officer has final authority in all matters of management that are not within the duties and authorities of the Board or of the shareholders general meeting. The current composition of the Executive Committee is as follows: EXECUTIVE COMMITTEE Ben van Beurden Simon Henry John Abbott Matthias Bichsel Andrew Brown Donny Ching Hugh Mitchell Marvin Odum Maarten Wetselaar Chief Executive Officer [A][B][C] Chief Financial Officer [A][B] Downstream Director [B][D] Projects & Technology Director [B] Upstream International Director [B][E] Legal Director [B][F] Chief Human Resources & Corporate Officer [B] Upstream Americas Director [B] Acting Upstream International Director [B][E] [A] Director of the Company. [B] Designated an Executive Officer pursuant to US Exchange Act Rule 3b-7. Beneficially owns less than 1% of outstanding classes of securities. [C] Ben van Beurden was appointed Chief Executive Officer in succession to Peter Voser with effect from January 1, Peter Voser stood down as a Director of the Company on December 31, [D] John Abbott was appointed Downstream Director in succession to Ben van Beurden with effect from October 1, [E] With effect from January 20, 2014, Maarten Wetselaar, Executive Vice President Integrated Gas, is acting Upstream International Director whilst Andrew Brown is on recuperation leave following a medical procedure. [F] Donny Ching was appointed Legal Director in succession to Peter Rees with effect from February 10, Peter Rees stood down with effect from January 10, BOARD COMMITTEES There are four Board committees made up of Non-executive Directors. These are the: Audit Committee; Corporate and Social Responsibility Committee; Nomination and Succession Committee; and Remuneration Committee. Each of these Board committees has produced a report which has been approved by the relevant chairman. A copy of each committee s terms of reference is available from the Company Secretary and can be found at Audit Committee The Audit Committee report which sets out the composition and work of the Audit Committee is on pages Corporate and Social Responsibility Committee The current members of the Corporate and Social Responsibility Committee are Charles O. Holliday (Chair of the Committee), Sir Nigel Sheinwald and Gerrit Zalm. Jeroen van der Veer stood down as a member of the Committee on May 21, The Committee met four times during the year; the Committee members attendances are shownonpage66. The Committee has a mandate to maintain a comprehensive overview of the policies and performance of the subsidiaries of the Company with respect to the Shell General Business Principles and Code of Conduct, as well as major issues of public concern. Conclusions and recommendations made by the Committee are reported directly to executive management and the Board. The Committee fulfils its responsibilities by reviewing the management of health, safety, security, environmental and social impacts of projects and operations. It also monitors emerging environmental and social issues. It additionally provides input into the Shell Sustainability Report and reviews a draft of the report before publication. In addition to holding regular formal meetings, the Committee visits Shell locations and meets with local staff and external stakeholders to

5 68 SHELL ANNUAL REPORT AND FORM 20-F 2013 REPORTS.SHELL.COM CORPORATE GOVERNANCE CONTINUED observe how Shell s standards regarding health, safety, security, the environment and social performance are being implemented. During 2013, the Committee visited South Africa and Alaska. Nomination and Succession Committee The members of the Nomination and Succession Committee are Jorma Ollila (Chairman of the Committee), Josef Ackermann and Hans Wijers. The Committee met six times during the year; the Committee members attendances are shown on page 66. The Committee keeps under review the leadership needs of the Company and identifies and nominates suitable candidates for the Board s approval to fill vacancies as and when they arise. In addition, it makes recommendations on who should be appointed Chairman of the Audit Committee, the Corporate and Social Responsibility Committee and the Remuneration Committee and, in consultation with the relevant chairman, recommends who should sit on the Board committees. It also makes recommendations on corporate governance guidelines, monitors compliance with corporate governance requirements and makes recommendations on disclosures connected with corporate governance of its appointment processes. During the year, the Committee dealt with the appointment of the new Chief Executive Officer and the new Downstream Director and continued with the programme of succession planning for the Nonexecutive Directors. It also considered the Executive Committee talent pipeline, and Board committee membership, and reviewed the terms of reference of the Audit Committee. Additionally, the Committee led the Board evaluation process and considered any potential conflicts of interest and the independence of the Non-executive Directors. The Board takes the issue of Boardroom diversity very seriously and believes that maintaining an appropriate balance of experience, skills, knowledge and backgrounds is key to its effective performance. It believes gender diversity is an important element of this mix. In 2011, it issued a statement welcoming the recommendations of the Davies Report and stated that it expected at least 25% of the Directors to be women by 2015, as recommended by the report. At the end of 2013, there was one woman on the Board (9%); however, two additional women will join the Board during 2014, subject to shareholder approval at the 2014 AGM, and this will increase the percentage of women on the Board to 25%. As part of its role in identifying and nominating suitable candidates for the Board s approval, the Nomination and Succession Committee will continue to review candidates from a variety of backgrounds and will seek to produce a list of candidates that fully reflects the Board s aim in relation to diversity, and in particular with reference to gender diversity. The Committee maintains regular contact with leading global search firms, including Egon Zehnder and Spencer Stuart, to identify and consider suitable candidates, and used the services of these two firms in relation to the appointments referred to above. They have no connection with the Company other than that of search consultants. It was not considered necessary to use open advertising in relation to these appointments. Remuneration Committee The Directors Remuneration Report, which sets out the composition and work of the Remuneration Committee, the remuneration policy and the remuneration of the Directors for the year ended December 31, 2013, is on pages SHAREHOLDER COMMUNICATIONS The Board recognises the importance of two-way communication with the Company s shareholders. The Chairman, the Deputy Chairman and Senior Independent Director, the Chief Executive Officer, the Chief Financial Officer and the Executive Vice President Investor Relations each meet regularly with major shareholders and report the views of such shareholders to the Board. As well as the Company giving a balanced report of results and progress at each AGM, all shareholders have an opportunity to ask questions in person. Shareholders are also free to contact the Company directly at any time of the year via dedicated shareholder addresses or via dedicated shareholder telephone numbers as given on the inside back cover of this Report. Shell s corporate website at has information for institutional and retail shareholders alike. The Company s Registrar, Equiniti, operates an internet access facility for registered shareholders, providing details of their shareholdings at Facilities are also provided for shareholders to lodge proxy appointments electronically. The Company s Corporate Nominee provides a facility for investors to hold their shares in the Company in paperless form. RESULTS PRESENTATIONS AND ANALYSTS MEETINGS The quarterly, half-yearly and annual results presentations as well as all major analysts meetings are announced in advance on the Shell website and through a regulatory release. These presentations are broadcast live via webcast and teleconference. Other meetings with analysts or investors are not normally announced in advance, nor can they be followed remotely by webcast or any other means. Procedures are in place to ensure that discussions in such meetings are always limited to non-material information or information already in the public domain. Results and meeting presentations can be found at This is in line with the requirement to ensure that all shareholders and other parties in the financial market have equal and simultaneous access to information that may influence the price of the Company s securities. NOTIFICATION OF MAJOR SHAREHOLDINGS Information concerning notifications of major shareholdings can be found on page 180. RESPONSIBILITY FOR PREPARING THE ANNUAL REPORT AND ACCOUNTS Information concerning the responsibility for preparing the annual report and accounts can be found on page 61. CONTROLS AND PROCEDURES The Board is responsible for maintaining a sound system of risk management and internal control, and for regularly reviewing its effectiveness. It has delegated authority to the Audit Committee to assist it in fulfilling its responsibilities in relation to internal control and financial reporting. A single overall control framework is in place for the Company and its subsidiaries that is designed to manage rather than eliminate the risk of failure to achieve business objectives. It therefore only provides a reasonable and not an absolute assurance against material misstatement or loss. The following diagram illustrates the control framework s key components: Foundations, Management Processes and Organisation. In 2013, the control framework was updated to put greater emphasis on the link between objectives, risks, controls and assurance. Foundations comprises the objectives, principles and rules that underpin and establish boundaries for Shell s activities.

6 GOVERNANCE 69 SHELL ANNUAL REPORT AND FORM 20-F 2013 CORPORATE GOVERNANCE Management Processes refers to the more material management processes, including how strategy, planning and appraisal are used to improve performance and how risks are to be managed through effective controls and assurance. Organisation sets out how the various legal entities relate to each other and how their business activities are organised and managed, and how authority is delegated. CONTROL FRAMEWORK External Environment Shell General Business Principles Board of Royal Dutch Shell plc, Chief Executive Officer and Executive Committee Code of Conduct Strategy, Planning and Appraisal Businesses and Functions Statement on Risk Management Standards and Manuals Controls and Assurance Legal Entities Foundation Management Process Organisation The system of risk management and internal control over financial reporting is an integral part of the control framework. Regular reviews are performed to identify the significant risks to financial reporting and the key controls designed to address them. These controls are documented, responsibility is assigned, and they are monitored for design and operating effectiveness. Controls found not to be effective are remediated. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks to the achievement of Shell s objectives. This has been in place throughout the year and up to the date of this Report and is regularly reviewed by the Board and accords with the Internal Control: Guidance to Directors (formerly known as the Turnbull Guidance). Shell has a variety of processes for obtaining assurance on the adequacy of risk management and internal control. The Executive Committee and the Audit Committee regularly consider group-level risks and associated control mechanisms. The Board has conducted its annual review of the effectiveness of Shell s system of risk management and internal control, including financial, operational and compliance controls. Pension plans Shell has a number of ways to address key pension risks. Principal among these is the Pensions Forum, a joint finance and human resources body chaired by the Chief Financial Officer, which provides guidance on Shell s input to pension strategy, policy and operation. The Forum is supported by the Pensions Risk Committee in reviewing the results of assurance processes with respect to pension risks (see Risk factors ). In general, local trustees manage the funded defined benefit pension plans and set the required contributions based on independent actuarial valuations in accordance with local regulations rather than the IFRS measures. For further information regarding the judgement applied in setting the actuarial assumptions under IFRS and its relationship to the financial position of Shell, see Notes 3 and 18 to the Consolidated Financial Statements. Treasury and trading In the normal course of business, financial instruments of various kinds are used for the purposes of managing exposure to interest rate, currency and commodity price movements. Treasury standards are applicable to all subsidiaries, and each subsidiary is required to adopt a treasury policy consistent with these standards. These policies cover: financing structure; interest rate and foreign exchange risk management; insurance; counterparty risk management; and use of derivative instruments. Wherever possible, treasury operations are carried out through specialist regional organisations without removing from each subsidiary the responsibility to formulate and implement appropriate treasury policies. Apart from forward foreign exchange contracts to meet known commitments, the use of derivative financial instruments by most subsidiaries is not permitted by their treasury policy. Other than in exceptional cases, the use of external derivative instruments is confined to specialist trading and central treasury organisations that have appropriate skills, experience, supervision, control and reporting systems. Shell s operations expose it to market, credit and liquidity risk, as described in Note 20 to the Consolidated Financial Statements. Management s evaluation of disclosure controls and procedures of Shell As indicated in the certifications in Exhibits 12.1 and 12.2 of this Report, Shell s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Shell s disclosure controls and procedures as at December 31, On the basis of that evaluation, these officers have concluded that Shell s disclosure controls and procedures are effective. Management s report on internal control over financial reporting of Shell Management, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over Shell s financial reporting and the production of the Consolidated Financial Statements. It conducted an evaluation of the effectiveness of Shell s internal control over financial reporting and the production of the Consolidated Financial Statements based on the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. On the basis of this evaluation, management concluded that, as at December 31, 2013, the Company s internal control over Shell s financial reporting and the production of the Consolidated Financial Statements was effective. PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements, has issued an attestation report on the Company s internal control over financial reporting, as stated in their report on page 100. The Trustee s and management s evaluation of disclosure controls and procedures for the Royal Dutch Shell Dividend Access Trust The Trustee of the Royal Dutch Shell Dividend Access Trust (the Trustee) and Shell s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the disclosure controls and procedures in respect of the Dividend Access Trust (the Trust) as at December 31, On the basis of this evaluation, these officers have concluded that the disclosure controls and procedures of the Trust are effective.

7 70 SHELL ANNUAL REPORT AND FORM 20-F 2013 REPORTS.SHELL.COM CORPORATE GOVERNANCE CONTINUED The Trustee s and management s report on internal control over financial reporting of the Royal Dutch Shell Dividend Access Trust The Trustee is responsible for establishing and maintaining adequate internal control over the Trust s financial reporting. The Trustee and the Company s management conducted an evaluation of the effectiveness of internal control over financial reporting based on the Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. On the basis of this evaluation, the Trustee and management concluded that, as at December 31, 2013, the Trust s internal control over financial reporting was effective. PricewaterhouseCoopers CI LLP, the independent registered public accounting firm that audited the financial statements, has issued an attestation report on the Trustee s and management s internal control over financial reporting, as stated in its report on page 174. Changes in internal control over financial reporting There has not been any change in the internal control over financial reporting of Shell or the Trust that occurred during the period covered by this Report that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting. Material financial information of the Trust is included in the Consolidated Financial Statements and is therefore subject to the same disclosure controls and procedures as Shell. See below and the Royal Dutch Shell Dividend Access Trust Financial Statements for additional information. ARTICLES OF ASSOCIATION The following summarises certain provisions of the Articles [A] and of the applicable laws of England. This summary is qualified in its entirety by reference to the Articles and the Act. [A] Copies of the Articles have been previously filed with the SEC and are incorporated by reference as exhibits to this Report. They can be found at Management and Directors The Articles provide that the Company s Board of Directors must consist of not less than three members nor more than 20 members at any time. The Company has a single tier Board of Directors headed by a Chairman, with management led by a Chief Executive Officer. See Board structure and composition on page 65. Under the Articles, at every AGM any Director who was in office at the time of the two previous AGMs and who did not retire at either of them must retire, and any such Director will be eligible to stand for reappointment. Further, a Director who would not otherwise be required to retire must retire if he or she has been in office, other than as a Director holding an executive position, for a continuous period of nine years or more at the date of the meeting, and any such Director will be eligible to stand for reappointment. However, notwithstanding the provisions of the Articles, the Company complies with the Code that requires all Directors to stand for annual reappointment by shareholders. At the AGM, shareholders can pass an ordinary resolution to reappoint each of the Directors or to appoint another eligible person in his or her place. Under the Articles: a Director may not vote or be counted in the quorum in respect of any matter in which he or she is materially interested including any matter related to his or her own compensation; the Directors may exercise the Company s power to borrow money provided that the borrowings of Shell shall not, without the consent of an ordinary resolution of the Company s shareholders, exceed two times the Company s adjusted capital and reserves (these powersrelatingtoborrowingmayonlybevariedbyspecial resolution of shareholders); and Directors are not required to hold shares of the Company to qualify as a Director. Rights attaching to shares DIVIDEND RIGHTS AND RIGHTS TO SHARE IN THE COMPANY S PROFIT Under the applicable laws of England, dividends are payable on A and B shares only out of profits available for distribution, as determined in accordance with the Act and under IFRS. Subject to the Act, if the Directors consider that the Company s financial position justifies the payment of a dividend, the Company can pay an interim dividend. Shareholders can declare dividends by passing an ordinary resolution although such dividends cannot exceed the amount recommended by the Board. It is the intention that dividends will be announced and paid quarterly. Dividends are payable to persons registered as shareholders on the record date relating to the relevant dividend. All dividends will be divided and paid in proportions based on the amounts paid up on the Company s shares during any period for which that dividend is paid. Any dividend or other money payable in cash relating to a share can be paid by sending a cheque, warrant or similar financial instrument payable to the shareholder entitled to the dividend by post addressed to the shareholder s registered address. Alternatively, it can be made payable to someone else named in a written instruction from the shareholder (or all joint shareholders) and sent by post to the address specified in that instruction. A dividend can also be paid by inter-bank transfer or by other electronic means (including payment through CREST) directly to an account with a bank or other financial institution (or other organisation operating deposit accounts if allowed by the Company) named in a written instruction from the person entitled to receive the payment under the Articles. Such an account must be held at an institution based in the UK unless the share on which the payment is to be made is held by Euroclear Nederland and is subject to the Dutch Securities Giro Act ( Wet giraal effectenverkeer ). Alternatively, a dividend can be paid in some other way requested in writing by a shareholder (or all joint shareholders) and agreed to by the Company. The Company will not be responsible for a payment which is lost or delayed. Where any dividends or other amounts payable on a share have not been claimed, the Directors can invest them or use them in any other way for the Company s benefit until they are claimed. The Company will not be a trustee of the money and will not be liable to pay interest on it. If a dividend or other money has not been claimed for 12 years after being announced or becoming due for payment, it will be forfeited and go back to the Company, unless the Directors decide otherwise. The Company expects that dividends on B shares will be paid under the dividend access mechanism described below. The Articles provide that if any amount is paid by the issuer of the dividend access share by way of dividend on the dividend access share and paid by the Trustee to any holder of B shares, the dividend that the Company would otherwise pay to such holder of B shares will be reduced by an amount equal to the amount paid to such holder of B shares by the Trustee. DIVIDEND ACCESS MECHANISM FOR B SHARES General A and B shares are identical, except for the dividend access mechanism, which will only apply to B shares. Dividends paid on A shares have a Dutch source for tax purposes and are subject to Dutch withholding tax.

8 GOVERNANCE 71 SHELL ANNUAL REPORT AND FORM 20-F 2013 CORPORATE GOVERNANCE It is the expectation and the intention, although there can be no certainty, that holders of B shares will receive dividends through the dividend access mechanism. Any dividends paid on the dividend access share will have a UK source for UK and Dutch tax purposes. There will be no Dutch withholding tax on such dividends and certain holders (not including US holders of B shares or B American Depositary Shares (ADSs)) will be entitled to a UK tax credit in respect of their proportional shares of such dividends. For further details regarding the tax treatment of dividends paid on the A and B shares and ADSs, refer to Taxation on pages Description of dividend access mechanism A dividend access share has been issued by The Shell Transport and Trading Company Limited (Shell Transport) to Computershare Trustees (Jersey) Limited (formerly EES Trustees International Limited) as Trustee. EES Trustees International Limited replaced Lloyds TSB Offshore Trust Company Limited as Trustee on January 26, Pursuant to a declaration of trust, the Trustee will hold any dividends paid in respect of the dividend access share on trust for the holders of B shares and will arrange for prompt disbursement of such dividends to holders of B shares. Interest and other income earned on unclaimed dividends will be for the account of Shell Transport and any dividends which are unclaimed after 12 years will revert to Shell Transport. Holders of B shares will not have any interest in the dividend access share and will not have any rights against Shell Transport as issuer of the dividend access share. The only assets held on trust for the benefit of the holders of B shares will be dividends paid to the Trustee in respect of the dividend access share. The declaration and payment of dividends on the dividend access share will require board action by Shell Transport and will be subject to any applicable limitations in law or in the Shell Transport articles of association in effect. In no event will the aggregate amount of the dividend paid by Shell Transport under the dividend access mechanism for a particular period exceed the aggregate of the dividend announced by the Board of the Company on B shares in respect of the same period. Operation of the dividend access mechanism If, in connection with the announcement of a dividend by the Company on B shares, the Board of Shell Transport elects to declare and pay a dividend on the dividend access share to the Trustee, the holders of B shares will be beneficially entitled to receive their share of that dividend pursuant to the declaration of trust (and arrangements will be made to ensure that the dividend is paid in the same currency in which they would have received a dividend from the Company). If any amount is paid by Shell Transport by way of a dividend on the dividend access share and paid by the Trustee to any holder of B shares, the dividend which the Company would otherwise pay on B shares will be reduced by an amount equal to the amount paid to such holders of B shares by the Trustee. The Company will have a full and unconditional obligation, in the event that the Trustee does not pay an amount to holders of B shares on a cash dividend payment date (even if that amount has been paid to the Trustee), to pay immediately the dividend announced on B shares. The right of holders of B shares to receive distributions from the Trustee will be reduced by an amount equal to the amount of any payment actually made by the Company on account of any dividend on B shares. If for any reason no dividend is paid on the dividend access share, holders of B shares will only receive dividends from the Company directly. Any payment by the Company will be subject to Dutch withholding tax (unless an exemption is obtained under Dutch law or under the provisions of an applicable tax treaty). The dividend access mechanism has been approved by the Dutch Revenue Service pursuant to an agreement ( vaststellingsovereenkomst ) with the Company and N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company) dated October 26, 2004, as supplemented and amended by an agreement between the same parties dated April 25, The agreement states, among other things, that dividend distributions on the dividend access share by Shell Transport will not be subject to Dutch dividend withholding tax provided that the dividend access mechanism is structured and operated substantially as set out above. The Company may not extend the dividend access mechanism to any future issuances of B shares without the approval of the Dutch Revenue Service. Accordingly, the Company would not expect to issue additional B shares unless that approval were obtained or the Company were to determine that the continued operation of the dividend access mechanism was unnecessary. Any further issue of B shares is subject to advance consultation with the Dutch Revenue Service. The dividend access mechanism may be suspended or terminated at any time by the Company s Directors or the Directors of Shell Transport, for any reason and without financial recompense. This might, for instance, occur in response to changes in relevant tax legislation. The daily operations of the Trust are administered on behalf of Shell by the Trustee. Material financial information of the Trust is included in the Consolidated Financial Statements and is therefore subject to the same disclosure controls and procedures as Shell. DISPUTES BETWEEN A SHAREHOLDER OR AMERICAN DEPOSITARY SHARE HOLDER AND ROYAL DUTCH SHELL PLC, ANY SUBSIDIARY, DIRECTOR OR PROFESSIONAL SERVICE PROVIDER The Articles generally require that, except as noted below, all disputes (i) between a shareholder in such capacity and the Company and/or its Directors, arising out of or in connection with the Articles or otherwise; (ii) so far as permitted by law, between the Company and any of its Directors in their capacities as such or as the Company s employees, including all claims made by the Company or on its behalf against Directors; (iii) between a shareholder in such capacity and the Company s professional service providers (which could include the Company s auditors, legal counsel, bankers and ADS depositaries); and (iv) between the Company and its professional service providers arising in connection with any claim within the scope of (iii) above, shall be exclusively and finally resolved by arbitration in The Hague, the Netherlands, under the Rules of Arbitration of the International Chamber of Commerce (ICC), as amended from time to time. This would include all disputes arising under UK, Dutch or US law (including securities laws), or under any other law, between parties covered by the arbitration provision. Accordingly, the ability of shareholders to obtain monetary or other relief, including in respect of securities law claims, may be determined in accordance with these provisions, and the ability of shareholders to obtain monetary or other relief may therefore be limited and their cost of seeking and obtaining recoveries in a dispute may be higher than otherwise would be the case. The tribunal shall consist of three arbitrators to be appointed in accordance with the ICC rules. The chairman of the tribunal must have at least 20 years experience as a lawyer qualified to practise in a common law jurisdiction which is within the Commonwealth (as constituted on May 12, 2005) and each other arbitrator must have at least 20 years experience as a qualified lawyer. Pursuant to the exclusive jurisdiction provision in the Articles, if a court or other competent authority in any jurisdiction determines that the arbitration requirement described above is invalid or unenforceable in relation to any particular dispute in that jurisdiction, then that dispute may only be brought in the courts of England and Wales, as is the

9 72 SHELL ANNUAL REPORT AND FORM 20-F 2013 REPORTS.SHELL.COM CORPORATE GOVERNANCE CONTINUED case with any derivative claim brought under the Act. The governing law of the Articles is the substantive law of England. Disputes relating to the Company s failure or alleged failure to pay all or part of a dividend which has been announced and which has fallen due for payment will not be subject to the arbitration and exclusive jurisdiction provisions of the Articles. Any derivative claim brought under the Act will not be subject to the arbitration provisions of the Articles. Pursuant to the relevant Depositary agreement, each holder of ADSs is bound by the arbitration and exclusive jurisdiction provisions of the Articles as described in this section as if that holder were a shareholder. VOTING RIGHTS AND GENERAL MEETINGS OF SHAREHOLDERS Shareholders meetings Under the applicable laws of England, the Company is required in each year to hold an AGM of shareholders in addition to any other meeting of shareholders that may be held. Each AGM must be held in the period six months from the date following the Company s accounting reference date. Additionally, shareholders may submit resolutions in accordance with Section 338 of the Act. Directors have the power to convene a general meeting of shareholders at any time. In addition, Directors must convene a meeting upon the request of shareholders holding not less than 5% of the Company s paid-up capital carrying voting rights at general meetings of shareholders pursuant to Section 303 of the Act. A request for a general meeting of shareholders must state the general nature of the business to be dealt with at the meeting, and must be authenticated by the requesting shareholders. If Directors fail to call such a meeting within 21 days from receipt of the request, the shareholders that requested the general meeting, or any of them representing more than half of the total voting rights of all shareholders that requested the meeting, may themselves convene a meeting which must be called within three months. Any such meeting must be convened in the same manner, as nearly as possible, as that in which meetings are required to be convened by the Directors. The Company is required to give at least 21 clear days notice of any AGM or any other general meeting of the Company. The Articles require that in addition to any requirements under the legislation, the notice for any general meeting must state where the meeting is to be held (the principal meeting place) and the location of any satellite meeting place, which shall be identified as such in the notice. At the same time that notice is given for any general meeting, an announcement of the date, time and place of that meeting will, if practicable, be published in a national newspaper in the Netherlands. The rules of the UKLA, Euronext Amsterdam and the NYSE require the Company to inform holders of its securities of the holding of meetings which they are entitled to attend. A shareholder is entitled to appoint a proxy (who is not required to be another shareholder) to represent and vote on behalf of the shareholder at any general meeting of shareholders, including the AGM, if a duly completed form of proxy has been received by the Company not less than 48 hours before the meeting. Business may not be transacted at any general meeting, including the AGM, unless a quorum is present. A quorum is two people who are entitled to vote at that general meeting. They can be shareholders who are personally present or proxies for shareholders entitled to vote at that general meeting or a combination of both. If a quorum is not present within five minutes of the time fixed for a general meeting to start or within any longer period not exceeding one hour which the chairman of the meeting can decide, and if the meeting was called by shareholders, it will be cancelled. Any other meeting will be adjourned to a day (being not less than 10 days later, excluding the day on which it is adjourned and the day for which it is reconvened), time and place decided upon by the chairman of the meeting. One shareholder present in person or by proxy and entitled to vote will constitute a quorum at any adjourned general meeting. Record dates Entitlement to attend and vote at the AGM is determined by reference to the Company s Register of Members. In order to attend and vote at the AGM, a member must be entered on the Register of Members or the register of the Royal Dutch Shell Corporate Nominee no later than the record date. The record date will not be more than 48 hours before the meeting, not taking account of any part of a day that is not a working day. Voting rights A and B shares have identical voting rights and vote together as a single class on all matters including the election of directors unless a matter affects the rights of one class as a separate class. If a resolution affects the rights attached to either class of shares as a separate class, it must be approved either in writing by shareholders holding at least three-quarters of the issued shares of that class by amount, excluding any shares of that class held as treasury shares, or by special resolution passed at a separate meeting of the registered holders of the relevant class of shares. It is the intention that all voting at general meetings will take place on a poll. A poll is voting by means of a ballot where the number of shares held by each voting shareholder is counted, as opposed to voting by way of a show of hands where the actual number of shares held by voting shareholders is not taken into account. Under the Act, if a poll is demanded, the resolution conducted on a poll must be approved by holders of at least a majority of the votes cast at the meeting. Special resolutions require the affirmative vote of at least three-quarters of the votes cast at the meeting to be approved. On a poll, every holder of A or B shares present in person or by proxy has one vote for every share he or she holds. This is subject to any rights or restrictions which are given to any class of shares in accordance with the Articles. No shareholder is entitled to vote if he or she has been served with a restriction order after failure to provide the Company with information concerning interests in his or her shares required to be provided under Section 793 of the Act. Major shareholders have no differing voting rights. Rights in a winding up If the Company is voluntarily wound up, the liquidator can distribute to shareholders any assets remaining after the liquidator s fees and expenses have been paid and all sums due to prior ranking creditors (as defined under the laws of England) have been paid. Under the Articles, the holders of the sterling deferred shares would be entitled (such entitlement ranking in priority to the rights of holders of ordinary shares) to receive an amount equal to the aggregate of the capital paid up or credited as paid up on each sterling deferred share but would not be entitled to participate further in the profits or assets of the Company. Any assets remaining after the entitlements of the holders of sterling deferred shares are satisfied would be distributed to the holders of A and B shares pro rata according to their shareholdings. Redemption provisions Ordinary shares are not subject to any redemption provisions.

10 GOVERNANCE 73 SHELL ANNUAL REPORT AND FORM 20-F 2013 CORPORATE GOVERNANCE Sinking fund provisions Ordinary shares are not subject to any sinking fund provision under the Articles or as a matter of the laws of England. Liability to further calls No holder of the Company s ordinary shares is currently liable to make additional contributions of capital in respect of the Company s ordinary shares. Discriminating provisions There are no provisions discriminating against a shareholder because of his or her ownership of a particular number of shares. Variation of rights The Act provides that the Articles can be amended by a special resolution of the Company s shareholders. The Articles provide that, if permitted by legislation, the rights attached to any class of shares can be changed if this is approved either in writing by shareholders holding at least three-quarters of the issued shares of that class by amount (excluding any shares of that class held as treasury shares) or by a special resolution passed at a separate meeting of the holders of the relevant class of shares. At each such separate meeting, all of the provisions of the Articles relating to proceedings at a general meeting apply, except that: (i) a quorum will be present if at least one shareholder who is entitled to vote is present in person or by proxy who owns at least one-third in amount of the issued shares of the class; (ii) any shareholder who is present in person or by proxy and entitled to vote can demand a poll; and (iii) at an adjourned meeting, one person entitled to vote and who holds shares of the class, or his or her proxy, will be a quorum. These provisions are not more restrictive than required by law in England. Limitations on rights to own shares There are no limitations imposed by the Articles or the applicable laws of England on the rights to own shares, including the right of non-residents or foreign persons to hold or vote the Company s shares, other than limitations that would generally apply to all shareholders. CHANGE OF CONTROL There are no provisions in the Articles or of corporate legislation in England that would delay, defer or prevent a change of control. THRESHOLD FOR DISCLOSURE OF SHARE OWNERSHIP The Disclosure and Transparency Rules of the UK s Financial Conduct Authority impose an obligation on persons [A] to notify the Company of the percentage of voting rights held as a shareholder, or through the direct or indirect holding of financial instruments, if the percentage of voting rights held in the Company reaches, exceeds or falls below 3% or any 1% threshold above 3%. [A] For this purpose persons includes companies, natural persons, legal persons and partnerships. Section 793 of the Act governs the Company s right to investigate who has an interest in its shares. Under that section, a public company can serve a notice on any person it knows or has reasonable cause to believe is, or was at any time in the preceding three years, interested in its shares in order to obtain certain information about that interest. The Articles provide that in any statutory notice under the relevant legislation, the Company will ask for details of those who have an interest and the extent of their interest in a particular holding. The Articles also provide that when a person receives a statutory notice, he has 14 days to comply with it. If he does not do so or if he makes a statement in response to the notice which is false or inadequate in some important way, the Company may, on notice, restrict the rights relating to the identified shares. The restriction notice will state that the identified shares no longer give the shareholder any right to attend or vote either personally or by proxy at a shareholders meeting or to exercise any right in relation to shareholders meetings. Where the identified shares make up 0.25% or more (in amount or in number) of the existing shares of a class at the date of delivery of the restriction notice, the restriction notice can also contain the following further restrictions: (i) Directors can withhold any dividend or part of a dividend or other money otherwise payable in respect of the identified shares without any liability to pay interest when such money is finally paid to the shareholder; and (ii) Directors can refuse to register a transfer of any of the identified shares which are certificated shares unless Directors are satisfied that they have been sold outright to an independent third party. Once a restriction notice has been given, Directors are free to cancel it or exclude any shares from it at any time they think fit. In addition, they must cancel the restriction notice within seven days of being satisfied that all information requested in the statutory notice has been given. Also, where any of the identified shares are sold and Directors are satisfied that they were sold outright to an independent third party, they must cancel the restriction notice within seven days of receipt of notification of the sale. The Articles do not restrict in any way the provision of the legislation which applies to failures to comply with notices under the legislation. The UK City Code on Takeovers and Mergers (the Takeover Code) imposes disclosure obligations on parties subject to the Takeover Code s disclosure regime. This code requires any person who is interested in 1% or more of any class of relevant securities of an offeree company or any securities exchange offeror to make an opening position disclosure following the commencement of an offer period. The Takeover Code also requires any person who is, or becomes, interested in 1% or more of any class of relevant securities of an offeree company or any securities exchange offeror to make a dealing disclosure if the person deals in any relevant securities of the offeree company or any securities exchange offeror during an offer period. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities, they will normally be deemed to be a single person for the purpose of the relevant provisions of the Takeover Code. Rule 13d-1 of the US Securities Exchange Act of 1934 requires that a person or group acquiring beneficial ownership of more than 5% of equity securities registered under the US Securities Exchange Act discloses such information to the SEC within 10 days after the acquisition. CAPITAL CHANGES The conditions imposed by the Articles for changes in capital are not more stringent than those required by the applicable laws of England. FURTHER INFORMATION The following information can be found at the terms of reference of the Audit Committee, Corporate and Social Responsibility Committee, Nomination and Succession Committee and Remuneration Committee (these documents explain the Committees roles and the authority the Board delegates to them); the full list of matters reserved to the Board for decision; Shell General Business Principles; Shell Code of Conduct; Code of Ethics for Executive Directors and Senior Financial Officers; and Articles of Association. Signed on behalf of the Board /s/ Michiel Brandjes Michiel Brandjes Company Secretary March 12, 2014